AIG To Report Q4 Results: Earnings Preview

2/26/2010 1:54 AM ET

Insurer American International Group, Inc. (AIG: Quote) is scheduled to report fourth-quarter results before the market opens Friday. On average, three analysts polled by Thomson Reuters expect the company to have lost $3.94 per share in the quarter, with loss estimates ranging from $2.71 to $5.30 per share. Revenues for the quarter are expected to be $23.32 billion. Analysts' estimates typically exclude special items.

AIG, once the world's largest insurer, almost collapsed in mid-September 2008 before the federal government came to its rescue, fearing that the company's downfall would wreak havoc on the entire financial system. The insurer received more than $180 billion in bailout money from the government, resulting in the government owning 79.9% of the company.

The New York-based company operates in four segments: General Insurance, Life Insurance and Retirement Services, Financial Services, and Asset Management. AIG is presently in the process of consolidation by selling non-core assets and spinning off some subsidiaries to repay the bailout loans.

Early last month, AIG sold its Canadian mortgage insurance business to the Ontario Teachers' Pension Plan. Terms of the deal were not disclosed. On February 2, MetLife, Inc. (MET) said it is in discussions with AIG on the acquisition of its subsidiary, American Life Insurance Co. AIG is likely to issue an update on its consolidation activities as well as indebtedness to the government when it reports results today.

In November 2009, AIG reported a profit for the third quarter, the second in a row, helped by a recovery in the value of its investments. However, the company said it expects continued volatility in reported results in the coming quarters, due in part to charges related to ongoing restructuring activities.

For the third quarter, net income attributable to AIG was $455 million. Third-quarter net income attributable to AIG common shareholders was $92 million or $0.68 per share. In the year-ago period, the company reported a net loss of $24.47 billion or $181.02 per share. The third-quarter results included net realized capital losses of $1.80 billion and non-qualifying derivative hedging activities gains of $344 million. Adjusted net income for the quarter was $1.91 billion or $2.85 per share.

In the fourth quarter of fiscal 2008, AIG reported a record net loss of $61.659 billion or $22.95 per share. The results included net realized capital losses of $21.552 billion and FAS 133 losses of $2.176 billion. Adjusted net loss for the quarter was $37.931 billion or $14.17 per share.

For fiscal 2008, AIG's net loss was $99.289 billion or $37.84 per share. Adjusted net income totaled $52.053 billion or $19.91 per share. For the full year 2009, analysts are expecting a loss of $17.19 per share.

Early this month, MetLife reported a plunge in fourth-quarter profit, hurt by higher investment losses and higher policy holder benefits and claims. The company's net income available to common shareholders fell to $289 million or $0.35 per share from $954 million or $1.20 per share in the same quarter a year ago. MetLife's total revenues for the quarter decreased to $12.34 billion from $13.96 billion in the prior-year quarter.

Prudential Financial, Inc. (PRU) reported a fourth-quarter profit on February 10, helped by a hefty gain from the sale of its stake in the Wachovia retail securities brokerage joint venture to Wells Fargo. The company reported net income for the fourth quarter of $1.79 billion or $3.79 per share, compared to a net loss of $1.66 billion or $3.89 per share for the year-ago quarter. Total revenue for the fourth quarter rose to $6.79 billion from $5.88 billion in the same quarter last year.

AIG closed Thursday's regular trade at $27.51, down $0.48 or 1.71%, on 12.38 million shares. For the past year, the stock traded in a wide range of $6.60-$55.90.